When a hedge fund managing $19 billion in assets targets renewable energy, is it time to listen?
Is there a growing consumer appetite for renewable energy? Hedge funds might be coming to that conclusion. Lansdowne Partners, one of the largest hedge funds in London managing about $19 billion in assets, is about to launch a clean energy fund. It will buy long positions in companies manufacturing clean energy equipment, providers of new energy technology and other operators in the renewables sector.
Last year it gained 14.8 percent in its long-short energy-focused equity fund, according to media reports. The fund, which is managed by Per Lekander, amounts to around $140 million. Other key drivers to its gains were long and short bets on utilities, energy infrastructure and renewables, according to the same media reports.
Hedge funds have been nibbling around the edges of the renewable energy universe for investment for some time. That is hardly surprising, given that globally, clean energy investment has been steadily rising and reached a record $329 billion last year.
Lansdowne’s clean energy fund, due to launch in the fourth quarter, has attracted interest from investors including public pension funds as well as university endowments in the United States, according to the Financial Times. Insurance companies, as well as institutional investors in Nordic countries who are drawn to ‘socially responsible’ investments, are also keen, said the paper.
It has been 18 months since the launch of the hedge fund’s main energy fund, which buys both long and short positions in companies. This fund, which has held positions in companies including SunPower (NASDAQ:SPWR) and First Solar (NASDAQ:FSLR), returned 14.8 percent last year but is down 5.5 percent this year.
Last year Elliott Capital Advisers, the U.K. arm of the American hedge fund, made a bet worth nearly £100 million ($133 million) on Britain’s solar power industry. It put money into half a dozen unnamed projects capable of generating about 85 megawatts – making it one of the largest privately-held solar power operators in the country.
“Elliott has hedged its bets by taking out short positions in five other renewable energy funds listed on the London stock market,” reported The Sunday Telegraph.
Meanwhile yesterday Insider Monkey revealed that, according to a recent 13G filing with the Securities and Exchange Commission, Andy Redleaf‘s Whitebox Advisors owns 2.31 million common shares of Renewable Energy Group Inc. (NASDAQ:REGI), which account for 5.6 percent of its shares outstanding.
The stock represents a new addition to Whitebox Advisors’ equity portfolio, according to the report.
Dina Medland is an independent writer, editor and commentator with a strong focus on issues around corporate governance, ethics, the workings of the boardroom and sustainable business. She is on the team of contributors to @ForbesEurope and is an ex-Financial Times staff member who has been a regular contributor in recent years. Further details about her background and a portfolio of work – including her commercially sponsored blog ‘Board Talk’ are available on her website http://www.dinamedland.com